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I am holding shares of Aurobindo Pharma at an average cost of ₹740. Is there a possibility of a reversal? What is the outlook?
Ramanathan M
Aurobindo Pharma (₹480): The stock has been in a strong downtrend since June 2021. It made a low of ₹397.30 earlier this month and has risen sharply over the last couple of weeks. Though there is no significant sign of a reversal, a strong long-term trendline support is around ₹360. As such there is not much room left on the downside even if the stock reverses lower again.
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We expect the region around ₹360 would be the bottom for the current downtrend. A strong rally either from here itself or after testing ₹360 can take Aurobindo Pharma stock price up to ₹650-₹750 over the next one year. From a long-term perspective, that rally will have the potential to target ₹1,100 in the next couple of years and more than that.
If you are a long-term investor, buy more at current levels and also at ₹380 if a fall below ₹400 is seen. Keep a stop-loss at ₹310. Revise the stop-loss up to ₹585 as soon as the stock moves up to ₹730. Move the stop-loss further up to ₹740 when the stock touches ₹880. Exit the shares at ₹1,000.
Read more: Aurobindo Pharma gets USFDA nod for osteoarthritis drug
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